Keywords
Refinery operation • Planning factors • Process evaluation • Cost estimates •
Cash flow analysis • Linear programming • Common terms and expressions
Introduction
This chapter is divided more or less into three parts. The first part (section “Refinery
Operation Planning”) deals with the planning of a refinery’s operation, which
includes its optimized crude runs, product slate, and any process expansion or
debottlenecking that may be required to meet this optimized operation. The second
part (sections “Process Evaluation and Economic Analysis,” “Discounted Cash
Flow and Economic analysis,” and “Using Linear Programming to Optimize
Configurations”) deals with the process economic evaluation of a proposed new
refinery or new facilities within an existing refinery. (The execution of the capital
project is discussed in the chapter “▶ Petroleum Processing Projects” elsewhere in
this Handbook.) The third part (section “Common and Expressions Used in Standard Economic Analyses”) is a summary of common terms and expressions used in
a standard economic analysis.
The second part of this chapter is closely related to the first part in so far as
process studies and the ultimate selection of any process or processing route are
based on the approved marketing strategies for the petroleum processing company.
This in turn is based on the conclusions following the work undertaken in the first
part. The separate project execution chapter, as noted above, describes the final
project activities to put equipment in place to implement an economic plan.
Refinery Operation Planning
The basic organization of an oil company consists essentially of three main
departments:
• The transportation department
• The refining department
• The marketing department
The functions of these three main departments are coordinated by a supply
department. This department undertakes this role in accordance with the following
sequence:
1. The marketing department informs the supply department with the quantities of
products they can sell.
2. The supply department, after making adjustments for stock levels, advises the
refinery of the quantity of each product required.
Petroleum Refinery Planning and Economics
687
Refinery operation • Planning factors • Process evaluation • Cost estimates •
Cash flow analysis • Linear programming • Common terms and expressions
Introduction
This chapter is divided more or less into three parts. The first part (section “Refinery
Operation Planning”) deals with the planning of a refinery’s operation, which
includes its optimized crude runs, product slate, and any process expansion or
debottlenecking that may be required to meet this optimized operation. The second
part (sections “Process Evaluation and Economic Analysis,” “Discounted Cash
Flow and Economic analysis,” and “Using Linear Programming to Optimize
Configurations”) deals with the process economic evaluation of a proposed new
refinery or new facilities within an existing refinery. (The execution of the capital
project is discussed in the chapter “▶ Petroleum Processing Projects” elsewhere in
this Handbook.) The third part (section “Common and Expressions Used in Standard Economic Analyses”) is a summary of common terms and expressions used in
a standard economic analysis.
The second part of this chapter is closely related to the first part in so far as
process studies and the ultimate selection of any process or processing route are
based on the approved marketing strategies for the petroleum processing company.
This in turn is based on the conclusions following the work undertaken in the first
part. The separate project execution chapter, as noted above, describes the final
project activities to put equipment in place to implement an economic plan.
Refinery Operation Planning
The basic organization of an oil company consists essentially of three main
departments:
• The transportation department
• The refining department
• The marketing department
The functions of these three main departments are coordinated by a supply
department. This department undertakes this role in accordance with the following
sequence:
1. The marketing department informs the supply department with the quantities of
products they can sell.
2. The supply department, after making adjustments for stock levels, advises the
refinery of the quantity of each product required.
Petroleum Refinery Planning and Economics
687